Cynthia Nelson
President and CEO, EasCorp
Industry experience: 34 years 

At some point between May and July, the Federal Reserve plans to launch its real-time payments system FedNow, and Cynthia Nelson wants credit unions to get ready. Nelson leads Burlington-based Eastern Corporate Federal Credit Union, known as EasCorp, a not-for-profit corporate credit union that provides correspondent banking and other services to member institutions. EasCorp has been participating in the FedNow’s pilot program and recently launched an educational program called Instant Payments Academy to help credit unions prepare for real-time payments. Instant Payments Academy is open to EasCorp’s member credit unions, primarily located in the New England area, and more than 600 credit unions nationwide that use Vertifi Software, EasCorp’s credit union service organization. 

Nelson joined EasCorp in 1989 while working on an MBA at Bentley University and studying to become a chartered financial analyst. She became president and CEO a year ago, replacing Jane Melchionda, who had retired after 43 years as EasCorp’s first leader. 

Q: What was your first year as president and CEO like?
A: The big story of my first year in this job was the big story for financial institutions generally during 2022, and that is the change in the economic landscape. EasCorp is a corporate credit union, and one of our primary purposes is to provide liquidity to member credit unions if, and when, they need it, despite the fact that our own balance sheet mirrors what is happening with them at the time. Fortunately for me, before taking this job, I oversaw EasCorp’s balance sheet activities, so I am very familiar with the company’s plans for managing through different economic circumstances, including this one. 

Q: How did EasCorp get involved with the FedNow pilot program?
A: We were involved in a Federal Reserve pilot program for the Check 21 [Act], which ultimately became the check exchange standard. When we learned of the FedNow pilot program, we were very excited about it. We are the correspondent banking institution for our member credit unions, so we will be performing the FedNow financial settlements on their behalf 24/7/365, mainly so they don’t have to do it on their own. However, our big adventure is on the technology side. Faster payments are used for so many everyday transactions throughout other parts of the world, but some are not yet supported in the U.S. because there is no ubiquitous payment rail here for them to run on. And FedNow is going to change that. I can’t think of more challenging or meaningful work right now for a team that likes to build innovative things. 

Q: What are some key lessons that EasCorp has learned during the pilot?
A: The pilot program is entering its third year, so the lessons are piling up. I think that the most important one is the value of collaboration. There are more than 100 organizations that are part of the pilot community. Most of us participate in one or more working groups that are intended to identify obstacles and create solutions. It’s challenging, and it’s also very energizing. EasCorp right now is part of the request-for-payment working group, and I’m very confident that this instant payment use-case will transform how all kinds of businesses deliver their invoices and collect payments for goods and services. It’s going to be a game changer for the financial institutions that feature this capability in their marketplace sooner rather than later. 

Q: What is the Instant Payments Academy?
A: First, I’d like to congratulate the Federal Reserve Bank for assembling a tremendous amount of information and resources on its FedNow website. Second, I see specialty training and accreditation programs being put in place by some industry groups, and I’m sure they will serve a valuable purpose. But what I haven’t found is what the Instant Payments Academy purports to do, which is to provide a multidisciplinary approach to planning for this instant payment project. We want credit union management teams to learn and, more importantly, develop a shared vision and shared strategy for how their credit union sees itself participating within the instant payment ecosystem – one year out, five years out and beyond. 

Q: What are some key points that credit unions should keep in mind as the launch approaches?
A: Being an early mover is good for a credit union’s brand. But more importantly, with FedNow, there’s a lot to learn and a lot to gain from hands-on experience. A few months ago – really without much apparent fanfare – the Fed said that one of the new pilot participants is the U.S. Department of Treasury’s Bureau of Fiscal Service, which makes millions of benefits disbursements to Americans each week. Imagine if your financial institution is prepared only to accept direct deposits on these disbursements. Your customers will grow increasingly impatient as their friends and family routinely get their funds ahead of them.  

Q: What are some benefits that will come with FedNow?
A: Individuals can make last minute or emergency payments, avoiding late fees, overdrafts and possible damage to credit scores. Having immediate access to funds means that a person may not have to rely on short-term and often costly financing, like payday loans. This is an extremely exciting value proposition to credit unions in particular. Businesses that accept instant payments can receive funds from sales immediately and obtain needed supplies by instantly paying their suppliers. These are some of the top-of-mind applications, but I guarantee there’s an army of entrepreneurs out there who are imagining all sorts of other useful ideas.  

Q: What will some of challenges be?
A: In my opinion, it can be summed up in one word, and that’s irrevocability. Once done, it cannot be undone. That irrevocability means that there is no limit on using the funds by the receiver. It also means that there is no structured way for the sender to get the funds back. Here in the United States, we have trained consumers that if they use the bank-provided services to move money electronically, they likely have some recourse to retrieve their funds. Programs like credit card zero liability and Regulation E provide recovery options in a variety of circumstances. But Reg E protections are not available if a transaction is authorized. This is the issue that is giving Zelle so much outsized attention lately. 

Nelson’s Five Favorite Leisure Activities: 

  1. Spending time at the lake 
  2. Skiing 
  3. Traveling 
  4. Watching New England sports teams 
  5. Baking